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Price inflation hurts savers and helps those with debt. Unless you're saying the poor have savings and the rich are in debt this would seem to help the poor and
by nerfhammer 16y ago
Price inflation hurts savers and helps those with debt. Unless you're saying the poor have savings and the rich are in debt this would seem to help the poor and hurt the rich.
- smokeyj 16y agoInflation does lessen the burden of debt, but you would have to have huge of debts for the payoff of inflation to be worth it (which is true for the government). Lets say a poor person has $3k in debt, if the cost of living increases they would be less likely to service the debt, while accruing more interest on the debt.
- nerfhammer 16y agoThere still doesn't seem to be a "massive wealth transfer to the rich" in there
- smokeyj 16y agoPrevious comment was explaining inflation doesn't help the poor, this is pretty non controversial. The transfer of wealth would be the fact that we bailed our companies that made stupid risks because they were greedy, and the only way to fix it was to give them gobs of cash. These gobs of cash are simply printed, contributing to inflation, while keeping greedy banksters employed. We saved the wealthy while subjecting the rest to inflation.
- nerfhammer 16y ago1) The bailout consists of loans 2) When a loan from the Fed is repaid, the "printed" money ceases to exist, so slightly more money is ultimately destroyed. The "gobs of cash" are not "simply printed". 3) There is no evidence of either price or monetary inflation actually occurring, as both price levels and the money supply tends to contract along with economic contraction 4) "bailed our companies" != wealth transfer to the rich
- smokeyj 16y agoPrinting dollars is figurative, I'm aware you don't have to print money to add imaginary money to an imaginary money supply, we have computers. Printing money is symbolic of more money going after less resources because of fiat currency (you can't print a loaf of bread). If banks got more money to go after less resources, this came at the expense of someone elses purchasing power at the time. Nothing is free, Bernanke didn't find perpetual energy, and "printing money" has its effects - namely being the business cycle.
- barrkel 16y agoWealthy people generally don't have most of their assets in cash, but rather in diverse investments with a better rate of return, at a minimum TIPS. But there are also advantages (tax etc.) to debt financing of things even if you are wealthy enough to buy things directly.